As per awareness of populace regarding the development, the largest chain of hospitals in Eastern India, a dedicated Asian PE fund Quadria Capital has agreed to sell the Medica Super specialty Hospital.
Europe and Quadria based co-investors Swedfund and DEG are in the procedure of appointing a number of investment bankers to carry out the process. One of the person commented that the planned deal will cost the chain at more than Rs. 550-650 Cr. The association comprising of Quadria Capital based in Singapore, DEG i.e. German development finance institution as well as subordinate of KfW and Swedfund, Swedish development finance institution.
Several investors had obtained the share from the venture of ICICI for greater than Rs. 150 Cr in the year 2013 at a estimation of around Rs. 250 Cr. Medica Super specialty Hospital, Kolkata is serving as the center for facilities in Tinsukia (Assam), Kalinganagar (Odisha), Patna, Rangapani (North Bengal), Siliguri and Ranchi.
According to one of the person, it is said that “The funds are in talks with various investment bankers, that includes a Chennai based boutique bank, and the mandate will be given in a month”. On the other hand, it is not yet clear that whether the promoters will trade their shares to the new investor. Alok Roy, Chairman of Medica Super specialty commented that “It is very prompt to discuss if we will hold the stake or sell”, whereas Co-Founder and Quadria Capital Managing Partner refused to comment. According to the report, mails sent to Swedfund and DEG remained unanswered. Quadria are having the assets in the management increasing by USD 1.6 Bn and the investments in around 18 companies amongst the region of Asia-Pacific.
Regardless of the longstanding investment in Medica, Quadria is holding shares of Bengaluru based super specialty oncology hospital chain in the Global Healthcare. The other Indian investments are including the South based hospital chain for instance Krishna Institute of Medica Science, bio pharma ingredient maker Concord Biotech, home based healthcare delivery services platform and research & bioinformatics services provider Strand Life Sciences.
After the changes in the guidelines introduced the price controls on knee caps and cardiac stents, various hospital chains observing a decrease in margins. Therefore, the promoters of mid-sized hospital chains are searching for the purchasers for their shares. Moreover, agents of AMRI Hospitals Ltd (Advanced Medica Research Institute) that is a chain of Kolkata based hospital, are considering the exit and holding the discussions with the group of hospitals. According to the ET report, FMCG the important Emami Group, promoter of AMRI, is searching for the evaluation of more than Rs. 900-1000 Cr and in discussions with Manipal Group. Emami is holding around 90% of shares in AMRI, having around 900 beds in several hospitals across Bhubaneshwar as well as Kolkata.
Habil Khorakiwala are promoting Wockhardt Hospitals looking for buyer for around four hospitals situated outside Mumbai.
PE-backed strategic buyers and hospital platforms are combining the positions in Indian Healthcare Business with more buyouts. PE-backed Manipal Hospitals is negotiating to accomplish Medanta Medicity owned by Naresh Trehan, whereas Malaysian Healthcare giant IHH Healthcare is carrying out the acquisition of the most prominent Fortis chain.
On the other hand, the business remaining underpenetrated with the capability of high growth. As per the PwC report, the hospital sector will need the investment of more than USD 250 Bn in the coming years. According to report, India requires to add around 3.5 Mn beds, 6 Mn users and around 3 Mn doctors.